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Tax Implications for Victims of Investment Fraud

Posted by CFTC Staff /
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If you've been a victim of investment fraud, there may be implications for your federal taxes once the investment fraud is discovered.

  • There are tax treatments that may be applicable to erroneously reported income and losses due to investment or trading fraud, including so-called "Ponzi schemes".
  • The Internal Revenue Service (IRS) provides an optional process under which investors who meet certain qualifications may treat the impact of financial fraud as a theft loss deduction.
    • This process avoids the potential difficulty of proving how much income reported by the taxpayer in prior years was fictitious or a return of capital.
  • To learn more about the rules regarding this issue, visit

If you have questions, are aware of suspicious activities, or believe you have been defrauded in the commodity futures, commodity options, or swaps markets, please contact the CFTC immediately at

For income tax questions, please contact the IRS at

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